By Suzanne McGee

The stock market has rallied decisively in recent months, leaving the Standard & Poor's 500 Index ($INX) with a return that has, almost miraculously, crossed into double-digit territory. But that hasn’t been enough to make investors -- even ultra-wealthy ones -- any happier with their financial advisers.

A new survey by Spectrem Group shows that less than three-fourths of investors with a net worth between $5 million and $25 million (excluding their home) say they are content with their adviser. Only 52% of them would follow their adviser to another firm; about half say their face-to-face meetings are "excellent." As for those newsletters -- well, if you're an adviser, you might as well quit before you lose more fans. A mere 24% of ultra-wealthy individuals find them worthwhile enough to classify them as "excellent."

Investor dissatisfaction has intensified within the last year or so. The 73% who said they are satisfied with their adviser is down from 80% in 2011 and 81% in 2010, so this isn’t just a group peeved because their money manager flogged them some dodgy mortgage securities or toxic auction-rate preferred securities and then, to cap it all off, left them to lose half of their remaining assets during the 2008-2009 market meltdown.

Unsurprisingly, perhaps, the less money you have, the less likely you are to be satisfied with your adviser. Single-digit millionaires, as they are referred to by some industry analysts, have a satisfaction rate of 72%, Spectrem says. (It defines that group as having between $1 million and $5 million of liquid net worth.) And if you’re merely a member of the "mass affluent," with $100,000 or more in assets, well, your satisfaction doesn’t even break above 70%.

None of this is good news for financial advisers, needless to say. After a bad year in 2008, they have struggled to keep abreast of volatile markets and identify investments that stand a chance of outperforming, only to be blindsided by emerging markets that decline to measure up to expectations and European policymakers’ apparent inability to resolve their fiscal crisis. In a period characterized by rock-bottom bond yields, even resorting to safe haven investments probably hasn’t kept clients happy.

And yes, it is particularly alarming that the smaller the client’s asset base, the less likely he or she is to believe that his adviser is working in his interest.

It’s worrying on several fronts. First, there are many more investors lower on the net worth ladder than there are ultra-wealthy individuals, yet these investors may have a harder time getting sound and suitable advice. Experienced and capable advisory firms must limit their client base to those they believe they can serve adequately -- a few hundred families, or in some cases only a few dozen. If you have a portfolio that is only $75,000 or $100,000, the odds are that unless your sister-in-law works for a great advisory firm, the kinds of financial pros willing to accept your business aren’t going to be in a position to give you much of their time or much customized advice.

Second, investors with less accumulated wealth are less likely to have a deep knowledge of investment strategies and an ability to oversee their own portfolios -- even as a mistake is likely to cost them far more dearly than it is their wealthier peers.

That mass affluent group also can include younger investors -- individuals in their 30s, just starting out and saving diligently for retirement. To the extent that they aren’t well served today, they may end up developing bad investment habits -- chasing momentum, failing to factor risk into their thinking, making errors in their asset allocation decisions.

They also may end up developing a lasting suspicion or wariness of advisers, something that may end up as bad news for both groups. Today’s young lawyer in his third year as an associate may well be a partner overseeing a lucrative practice at a major law firm in 15 years’ time, and pulling in millions a year. If he feels he was given short shrift by his adviser a decade or more ago, he’s less likely to be willing to work with or listen to a more competent adviser down the road.

Investors have a responsibility to find an adviser that’s right for them -- it’s their money at stake, after all. But unhappy clients may also want to bear in mind the kind of climate in which their adviser is operating. Rarely have their been quite as many macro-level uncertainties, from the "fiscal cliff" and the eurozone crisis, to the lackluster performance of the emerging markets, especially China. Add to that the absurdly low interest rates, and you’ve got a recipe for a difficult investment environment, especially when a diligent adviser is managing a portfolio with an eye to risk management as well as tax consequences and other cost-related issues.

Even with all that, advisers can do better. They can foster stronger and more successful relationships by selecting their clients carefully, making sure that they only take on those whom they feel they can serve well -- and that doesn’t just mean those with the most money. If a client’s investment style isn’t compatible with that of their adviser, then it’s up to the professional to politely say, "I don’t think I am able to be helpful to you in this situation" -- not as a threat, but as part of a suggestion that they might be better served by turning elsewhere.

George Walper, president of the Spectrem Group, suggested in a press release announcing the survey results that “advisers need to demonstrate sophisticated, in-depth knowledge about taxes, financial planning and related issues while working more collaboratively with investors who may well have identified investing opportunities on their own.”

I think Walper has diagnosed the problem, but the solution strikes me as a little too simplistic.
The more sophisticated (and wealthy) the client, the more sophisticated the knowledge base among advisers these days. At the larger firms catering to individuals or families with tens of millions of dollars, most advisers now work in groups that include accountants, lawyers and other professionals. At the lower end of the spectrum, it’s probably unreasonable to expect sophisticated advice; if you have $100,000, you aren’t going to be dabbling in hedge funds, for instance, and your adviser probably knows the relative merits of actively managed mutual funds and ETFs.

Nor am I sure that advisers necessarily want to defer to their clients’ eagerness to identify their own investments, even in the name of keeping them happier. Short-term happiness is no bargain if it comes at the expense of long-term portfolio losses, after all – and few advisers dread anything more than having to evaluate the great stock tip or investment idea that their client heard about at a cocktail party or on the golf course. But if you’re not an accountant or otherwise a financial professional, you’ll probably sleep better at night and have more time available for your other pursuits if you are willing to entrust your financial affairs to an adviser -- after doing a suitable amount of due diligence, naturally.

The relationship between an adviser and his client is fraught with peril. But just because you’re not as happy with your portfolio as you used to be doesn’t mean it’s time to cast the money manager off and go solo. While that might be fine for a handful of people, for most a better option is to embark on a quest for an adviser with whose style, investment philosophy and personality you can be at ease. The markets offer enough sources of stress; your adviser should help you manage that, not add to it.

Suzanne McGee is a columnist at The Fiscal Times. Subscribe to The Fiscal Times' FREE newsletter.

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